Iran File

A U.S. withdrawal from Syria empowers the IRGC and regime’s economic influence in the region

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Forecast: A U.S. military withdrawal from Syria will grant Iran an opportunity to expand its economic influence in Syria. Iran is setting conditions to increase its economic influence and control in Syria, conditions that will leave it well-positioned to capitalize on the U.S. withdrawal and the likely loss of Kurdish control over key oil fields in eastern Syria. The participation of Islamic Revolutionary Guards Corps (IRGC)- and regime-affiliated companies in Syria’s reconstruction will finance Iranian malign regional behavior, to the detriment of U.S. interests.

Iran will capitalize on the potential Kurdish loss of control over important Syrian oil fields following a U.S. withdrawal from Syria. Senior regime officials have remained silent following U.S. President Donald Trump’s December 19th announcement that U.S. forces will leave Syria. Iranian responses to Trump’s announcement have mostly come from Friday prayer leaders. Supreme Leader Representative to Ardabil Province and Ardabil Friday Prayer Leader Ayatollah Hassan Ameli *boasted that a U.S. decision to withdraw from Syria “hands that country to Iran with [open arms]” on December 21. President Hassan Rouhani traveled to Ankara, Turkey to meet with Turkish President Recep Tayyip Erdogan on December 19 for *discussions on regional security, countering Kurdistan Workers’ Party (PKK) and PKK-affiliated Kurdistan Free Life Party (PJAK) militants along the Iran-Turkey border, and promoting economic cooperation between Iran and Turkey. Rouhani’s visit to Anakara was *pre-planned and did not include any public remarks on the U.S. announcement to withdraw from Syria. Erdogan *threatened on December 12 to begin a military operation against Kurdish militants in northeastern Syria. Trump reportedly agreed to withdraw from Syria after speaking with Erdogan on December 14. Turkey is preparing for future military action against the PKK’s Syrian affiliate but will likely time its attack to capitalize on the U.S. military withdrawal and to disrupt possible negotiations between the Syrian Democratic Forces (SDF) and the Syrian regime. The SDF may cede some control over the management of oil fields in eastern Syria in exchange for regime protection against Turkey, which may ultimately benefit Iran.

Iran is setting conditions for increasing its economic influence and control in Syria. Iran is well-positioned to take advantage of the U.S. withdrawal in Syria and the likely loss of Kurdish control over oil fields in eastern Syria. Deputy Roads and Urban Development Minister for Planning and Resources Management Amir Amini *noted on December 19 that Iran and Syria are negotiating a long-term strategic agreement to facilitate Iranian investment in Syria, particularly in phosphates, cement, building materials, and other civil engineering projects. Amini also admitted that IRGC-owned Khatam ol Anbia Construction Headquarters has already begun to invest in Syria’s reconstruction. Khatam ol Anbia is heavily involved in multi-billion dollar drilling, oil and gas, civil and military construction, infrastructure, and dam projects in Iran. Its projects and activities finance the IRGC and its malign operations across the region. Khatam ol Anbia’s participation in Syrian reconstruction efforts will mitigate the effect of U.S. sanctions against the IRGC and bolster the IRGC’s economic vitality. Khatam ol Anbia could well be the primary beneficiary of construction projects across Syria. Khatam ol Anbia may secure lucrative oil deals in eastern Syria and take advantage of any Syrian Kurdish loss of important oil fields.

Iranian participation in Syrian construction projects also may benefit the regime’s largest economic holding company, the Foundation of the Oppressed (Bonyad-e Mostazafan). The foundation, whose director is directly appointed by the Supreme Leader, is heavily involved in construction projects in Iran. The recent appointment of Mohammad Eslami as Roads and Urban Development Minister in October 2018 presaged a more prominent role for the foundation in Syria. Eslami *served in several senior positions for the foundation, including as its civil division executive deputy and as chairman of the board of directors for two of its subsidiary companies. The ministry has been in *negotiations with Syrian officials on the construction of 30,000 residential units in Syria. The Foundation of the Oppressed will seek to win these contracts, and may well do so with its former executive heading the Roads and Urban Development Ministry. The U.S. withdrawal from Syria enables the Iranian regime to expand its economic and political influence across the region. This decision is in direct contradiction with stated U.S. national security objectives, such as “neutralizing Iranian malign influence” in the Middle East.